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United States ex rel. Abea v. Odiye

United States District Court, N.D. California

November 15, 2019

UNITED STATES ex rel. KARLA ABEA, Relator,
v.
DEBBIE ODIYE, GODWIN ODIYE and DOES 1 through 50, inclusive, Defendants.

          ORDER GRANTING IN PART MOTION FOR LEAVE TO AMEND AND VACATING HEARING

          WILLIAM ALSUP, UNITED STATES DISTRICT JUDGE.

         INTRODUCTION

         In this claim for relief, the plaintiff relator in Section 8 housing alleges that defendant landlords have violated the Federal False Claims Act and various state and local laws. Although a case management order deadline ordered that requests for leave to amend be made by June 28, 2019 - five months ago - plaintiff now requests for leave to amend the complaint. For the reasons stated below, this order holds that plaintiff's requests are Granted in part and Denied in part. The hearing set for November 21, 2019, is Vacated.

         STATEMENT

         Plaintiff relator rents a San Francisco residential unit from defendant, residing in the “upper unit” of a single-family home which has been converted into two units. The units share one electricity, gas, and water meter. Plaintiff's tenancy was subsidized through the Section 8 Housing Choice Voucher Program. The program is administered by the San Francisco Housing Authority, which receives funding from the United Stated Department of Housing and Urban Development. In order to be eligible for Section 8 tenant-based housing assistance payments, landlords are required to enter into an agreement with SFHA entitled Housing Assistance Payment Contract, referred to as a HAP Contract. Under the HAP Contract, a housing subsidy is paid directly to the landlord on behalf of the participating family, based on SFHA's calculation of “reasonable rent.” The family then pays the difference between the actual rent charged by the landlord and the government subsidy. 24 C.F.R. § 982.1(a). Defendant received payments from SFHA through this program by reason of plaintiff's Section 8 tenancy (First Amd. Compl. ¶¶ 8, 9, 16, 18-20).

         Throughout plaintiff's tenancy, however, plaintiff and defendant have clashed. This conflict culminated in October 2018, when plaintiff brought the present action against defendant. Plaintiff asserts twelve claims against defendant, including violations of the False Claims Act, 31 U.S.C. § 3729 et seq., and various other violations of state and local law.

         In February 2019, defendant filed a motion to dismiss (Dkt. No. 15). In March, after full briefing on the motion to dismiss but before oral argument or ruling, plaintiff filed a first amended complaint. The undersigned denied the motion to dismiss as moot (Dkt. Nos. 21, 22, 24). Later that month, defendant filed a motion to dismiss several claims in the first amended complaint (Dkt. No. 29). The undersigned issued both an order denying the motion to dismiss and an order scheduling case management. The scheduling order provided that leave to amend pleadings must be sought by June 28, 2019, non-expert discovery must be completed by January 2020, and the trial date to be set for April 2020 (Dkt. Nos. 37, 40). The parties engaged in mediation in September.

         Despite the deadline to amend having long since passed, plaintiff now moves to amend the pleadings. Plaintiff alleges that this delayed amendment is necessary to (1) amend existing False Claims Act claims to conform to allegedly new evidence, (2) allege a new claim based on new evidence, and (3) dismiss a claim barred by the statute of limitations. Defendant in turn makes a motion to strike and a motion for sanctions (Dkt. Nos. 50-52). For the reasons stated below, this order holds that plaintiff's request to dismiss the claim barred by the statutes of limitations is Granted. All other requests are Denied.

         ANALYSIS

         Leave to amend a complaint shall be freely given when justice so requires under FRCP 15(a). This standard is applied liberally. FRCP 15(a) does not apply, however, when a district court has established a deadline for amended pleadings under FRCP 16(b). Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 607-08 (9th Cir. 1992). Once a scheduling order has been entered, the liberal policy favoring amendments no longer applies. Subsequent amendments are not allowed without a request to first modify the scheduling order. Id. at 608-09. At that point, FRCP 16(b)(4) provides that leave to amend following entry of such a case management order may be granted only upon a showing of “good cause” for the delay and with the judge's consent. This good cause standard “primarily considers the diligence of the party seeking the amendment.” Coleman v. Quaker Oats, 232 F.3d 1271, 1294 (9th Cir. 2000).

         As an initial matter, plaintiff failed to first request to modify the scheduling order. She merely moved to amend her complaint. Her motion makes no reference to the passed June deadline. Our court of appeals has generally declined to consider motions to amend the complaint as motions to amend the scheduling order. Johnson, 975 F.2d at 608-09. Even if this order were to treat plaintiff's motion as such, the result would not change. As will be shown below, plaintiff cannot meet the good cause standard under FRCP 16(b).

         1. Motion to Amend Facts Relating to False Claims Act Allegations.

         Plaintiff first seeks leave to amend so as to square the complaint's description of the HAP Contract with new factual developments. Neither party possesses the subject HAP Contract, so its terms cannot be easily discerned. Instead, plaintiff describes the contents of the HAP Contract in the first amended complaint. As relevant here, it alleges: (1) defendant entered into a HAP Contract with the SFHA; (2) the HAP Contract was not signed; (3) defendant entered into an oral contract with the United States by which defendant understood she would need to comply with the terms of the HAP Contract; and (4) the HAP Contract provided that defendant would pay for utilities.

         Plaintiff argues that two recent developments require this description be adjusted. First, in August 2019 defendant deposed an SFHA employee who explained that “the HAP Contract must have been in writing and signed by [d]efendant in order for any subsidy payments to be issued” (Hain Decl. ¶ 3, emphasis added). Second, SFHA produced the complete file on plaintiff's tenancy at the subject residence, and it revealed conflicting indications over who the HAP Contract listed as responsible for utility payments. Thus, plaintiff argues, “it is no longer appropriate for the complaint to allege that the HAP Contract was verbal” or that it “must have provided that defendant would pay all utilities” (Br. at 13). Plaintiff ...


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